The Increasing Demand of Intellectual Property Protection

The Defense of Intellectual Property Rights in the Global Information Order Jeffrey A. Hart Department of Political Science Indiana University Bloomington, IN 47405 and Sangbae Kim Department of Political Science Indiana University Bloomington, IN 47405 Paper prepared for delivery at the annual meeting of the International Studies Association, Chicago, February 21-24, 2001. Nathan Zook provided research assistance. Please do not cite or quote without the written permission of the authors. 1 Introduction A key feature of contemporary competition over digital technologies is increasing demand for intellectual property protection on the part of those claiming ownership to that property (National Research Council 1993). Rising costs of research and development (R&D) combined with wide availability of inexpensive copying, storage, and transmission are driving this demand (Mowery ed. 1996, p.305). Since the lion’s share of intellectual property in the global system is owned by private multinational corporations (MNCs), the MNCs predictably have aligned themselves with the governments of powerful nation-states, like the United States, that are the home of influential owners of intellectual property. In the United States, this includes, among others, the entertainment industry, chemical and pharmaceutical firms, computer and integrated circuit manufacturers, and software companies. Unscrupulous individuals or firms can quickly and cheaply copy movies or computer software programs costing millions of dollars to develop with fairly rudimentary equipment. The evidence of this can be seen on many street corners in Asia, where pirated copies of Microsoft Windows programs on compact discs can often be purchased for the equivalent of a few dollars. Programs can also be “reverse engineered” in more subtle and sometimes illegal ways by the process of “decompilation.”1 The possibility of decompilation has its roots in the unusual characteristics of software technology, as Joel West points out: 1If engineering is the process of turning a product design into an actual product, then reverse engineering means taking the actual product and deducing from it as much as possible about the original design. In software development, the most significant (and controversial) form of reverse engineering is decompilation—the systematic disassembly and adaptation of computer programs. 2 An unusual quality of software is that its plan is endogenous and complete. The translation from source code to binary software (compilation) is entirely automatic, by means of the computer… A second software characteristic is that plans can be deduced from the original machine—i.e., a source code can be decompiled from the binary software. (West 1995, p.1124) This process of translation via decompilation is still difficult and lacks some of the information that makes the original source code so valuable. As West explains, however, the technical tools for decompiling programs have gotten progressively better over time because they are an essential part of maintaining one’s competitiveness in the industry. Software, like recorded music, films, and videos, is highly vulnerable to infringement of intellectual property rights.2 It is no surprise then that software firms want more secure mechanisms to protect their intellectual property. They must do this in order to recoup substantial investments in R&D. Even after they have done this, they want to protect their intellectual property to assure an adequate return on investment to their shareholders. Recent evidence shows that information technology firms are seeking greater intellectual property protection through legal mechanisms, such as patents and copyrights. Similarly, the number of patent and copyright infringement lawsuits is increasing. These current trends have raised the salience of intellectual property laws and their enforcement in the eyes of national governments (Clapes 1993; Moore 1997). 2Semiconductor chips pose similar problems with respect to existing forms of intellectual property protection. As in computer software development, designing new chips and preparing masks for chip 3 International disputes over intellectual property rights can be understood from the perspective of relational power – the power of actor A over actor B (and vice versa). Thus, for example, when the United States attempts to coerce or at least influence the People’s Republic of China to adopt and enforce strict intellectual property laws, we are in the realm of relational power. The source of potential relational power in this relationship is that U.S. firms possess intellectual property that is desired in the P.R.C. but are not willing to provide access to it without adequate compensation. The P.R.C. government wants access to these technologies for its citizens but many of them do not want to pay the demanded price and the government is at least ambivalent about enforcing intellectual property laws. In addition, the U.S. government may withhold other things that China wants, like MFN status, as part of its campaign to change Chinese practices in this area. This puts the dispute into the realm of “linkage politics,” where progress on one issue depends on concessions made in another area. Beyond this relational aspect of intellectual property disputes is a deeper question of structural power. Nation-states compete not just over relational power but also over structural power – or meta-power as Stephen Krasner calls it. According to Krasner, “relational power behavior refers to efforts to maximize values within a given set of institutional structures; meta-power behavior refers to efforts to change the institutions themselves…[and]…the ability to change the rules of the game.” (Krasner 1985, p.14) International regimes for intellectual property protection are not a given but rather must be periodically redefined by actors themselves, while interpreting their material interests and circumstances. Susan Sell, for example, stresses the role of ideas – in relation to manufacturing is expensive, but copying chip designs and reproducing chip masks is relatively simple and inexpensive. 4 power – in defining or redefining material interests within intellectual property regimes (Sell 1998). In the similar vein, Joseph Nye’s concept of soft power provides a useful conceptual framework [Nye, 1990]. Soft power is the ability to achieve desired outcomes in international affairs through attraction rather than coercion. It works by convincing others to follow, or getting them to agree to, norms and institutions that produce a desired behavior. Soft power can rest on the appeal of ideas or the ability to set the agenda in ways that shape the preferences of others. In the same context, Susan Strange argues that, “technological changes do not necessarily change power structures. They do so only if accompanied by changes in the basic belief systems which underpin or support the political and economic arrangements acceptable to society” (Strange 1988, p.123). If we rely on the above views, international regimes for protecting intellectual property rights, such as the WTO/GATT agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs), may conceal a lot more than they reveal. Hamilton (1997), for example, argues that: …far from being limited to trade relations, correcting the international balance of trade, or lowering customs trade barriers, TRIPs attempts to remake international copyright law in the image of Western copyright law … TRIPs imposes a Western intellectual property system across the board – which is to say that it imposes presuppositions about human value, effort, and reward. ... A people must value individual achievement and believe in the appropriateness of change and originality if it is going to concede to and adopt a Western-style intellectual property regime. Indeed, there is an 5 intimate link between respect for individual human rights and respect for a copyright system that values and promotes individual human creative achievement. (Hamilton 1997, pp.243-45) In this respect, arguments over international regimes of intellectual property protection are really over structural, not relational, power. They often have a strong ideational and persuasive element to them, because one way to exercise structural power is to control the framing of key issues by getting others to adopt a particular set of ideas. Wintelism in the United States The sophisticated management of “intellectual property” was the second essential—but somewhat environmental—ingredient in the success of Wintelism in the United States. According to Borrus and Zysman (1997), Wintelism started off as a way to link “the names of the two most evident major victors of the new standards competition: Microsoft Windows the software operating system and Intel microprocessors.” [Borrus and Zysman 1997, p.141] According to Borrus and Zysman, Wintelism has come to symbolize something much bigger than that: Wintelism is the code word … to reflect the shift in competition away from final assembly and vertical control of markets by final assemblers. Competition in the Wintelist era … is a struggle over setting and evolving de facto product market standards, with market power lodged anywhere in the value chain, including product architectures, components, and software. [Borrus and Zysman 1997, p.162] 6 Following the example of Borrus and Zysman, we define Wintelism to be the structural dominance of components providers, like Intel and Microsoft, over assemblers, like IBM

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